Beware Zombies, Vampires, and TCPA

Some scary stories are real—and potentially costly.

November 25, 2013

I love a good scary movie or book. If you aren’t watching “The Walking Dead,” why aren’t you? If you do, you know about zombies.

My daughter, now a sophomore at the University of Wisconsin—a third-generation Badger—loved the “Twilight” books. I’ve been told there are vampires and werewolves involved.

TCPA, on the other hand, is real, seriously scary, and has been around for more than 20 years. But I bet many of you have never heard of TCPA.

Congress passed the Telephone Consumer Protection Act (TCPA) in 1991. It gives members the right to sue, including class-action lawsuits, to collect damages for receiving unsolicited marketing calls, texts, and faxes generated by autodialing machines.

The rules are complicated and hard to describe. But what makes TCPA so scary is the damages associated with violations of the rules, ranging from $500 per negligent violation up to $1,500 per knowing violation of the rules.

As you can see, if you are unaware of the rules, you could quickly expose your credit union to millions of dollars of potential damages.
If the law has been around since 1991, why write about it now? Two reasons:

1. Lawyers have discovered the large amounts of damages that can be won in class action lawsuits. Additionally, as this is a “strict liability” statute, it doesn’t matter what a caller’s intent was if they call without express consent of the owner of the cell phone.

Thus, if you have a person’s consent, but the phone is transferred to another individual and you call that number, some courts have held you violate the rule even though you didn’t intend to call that individual and thought you were calling the previous owner of the phone.

2. There was a change in the rules regarding TCPA that went into effect October 16, 2013.

These new rules have three major components you need to be aware of:

?Members must now provide prior express written consent to receive marketing calls, texts, and faxes. Previously, only prior express consent was needed.

The difference? Under the old rules, for example, a member giving you their cell phone number was deemed to have given you prior express consent to receiving calls or texts.

?The prior written consent must contain a clear and conspicuous disclosure that the person is authorizing the calls and that agreeing to the calls is not a requirement to obtain the loan or services being offered by the credit union.

?The credit union may no longer rely on prior express consent in making telemarketing calls to members. In other words, you have to start over to get consent from your members.

What does this mean for your credit union?

If you are using an automated dialing system or an artificial or prerecorded message, you must make sure you obtain prior authorized written consent to make those calls.

You also must have processes in place to monitor and manage lists on numbers to which you make calls to ensure, the best you can, the numbers are for phones for which you have received prior express written consent to call. This includes processes to ensure people who revoke consent are accommodated.

Watch closely the legal climate around TCPA. New decisions on particular fact situations may affect your programs. These decisions are being rendered by courts extremely frequently.

Autodialing systems and prerecorded messages may be a tremendous productivity enhancer for your credit union. But they can be a scary source of risk and loss for you, too.

Zombies and vampires might not be real—but TCPA is.

BILL KLEWIN, Esq. is the director of regulatory compliance for CUNA Mutual Group. Contact him at 608-665-7009.